Boston Globe real estate expert Benny Kass recently urged homeowners to apply for HELOC loans:

“I strongly recommend that every homeowner who has some equity in his or her house get a HELOC, or home equity line of credit. Many banks will not charge any fees for setting this up. The advantage of such a loan is that you do not have to pay any interest (or any monthly mortgage payments) until such time as you begin to borrow money — i.e., tap into the line of credit.

To me, it’s a checkbook in a desk drawer — ready to be used for that rainy day.”

Unlike most other loans, HELOCs do not require the borrower to pay interest if he chooses not to use the money. The borrower has the funds available to use at his convenience, but there is rarely a penalty for declining to withdraw funds.

See: How a HELOC Works 

Tags | Heloc, home equity line of credit